Global| May 05 2015U.S. ISM Nonmanufacturing Index Recovers as Activity and New Orders Firm
by:Tom Moeller
|in:Economy in Brief
Summary
The Institute for Supply Management (ISM) Composite Index of Nonmanufacturing Sector Business improved to 57.8 during April from an unrevised 56.5 in March. The latest figure was the highest since November and exceeded expectations [...]
The Institute for Supply Management (ISM) Composite Index of Nonmanufacturing Sector Business improved to 57.8 during April from an unrevised 56.5 in March. The latest figure was the highest since November and exceeded expectations for 56.2 in the Action Economics Forecast Survey.
Haver Analytics constructs a Composite Index using the nonmanufacturing ISM index and the ISM factory sector measure, released Friday. It increased to 57.0, the highest level since November. During the last ten years, there has been a 72% correlation between the index and the q/q change in real GDP.
Improvement last month in the nonmanufacturing composite index reflected a sharp recovery in the business activity reading to 61.6, the highest point since November. The new orders series also rebounded to the highest level in three months. The employment index essentially marked time m/m, but it still was at the highest level in six months. During the last ten years, there has been an 88% correlation between the employment index and the m/m change in service plus construction payrolls. The supplier delivery index declined, indicating the slowest delivery speeds this year.
The prices paid series reversed most of its March increase and indicated roughly stable prices. Fifteen percent (NSA) of respondents paid higher prices, though that still was down from the 2011 high of 57%. A roughly stable 10% paid lower prices, the least in six months.
The ISM data are available in Haver's USECON database. The expectations figure from Action Economics is in the AS1REPNA database.
Is Transition to Inflation Targeting Good for Growth? from the Federal Reserve Bank of San Francisco can be found here.
| ISM Nonmanufacturing Survey (SA) | Apr | Mar | Feb | Apr'14 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| Composite Diffusion Index | 57.8 | 56.5 | 56.9 | 55.3 | 56.3 | 54.6 | 54.6 |
| Business Activity | 61.6 | 57.5 | 59.4 | 60.3 | 59.7 | 56.7 | 57.6 |
| New Orders | 59.2 | 57.8 | 56.7 | 58.3 | 58.6 | 55.8 | 56.5 |
| Employment | 56.7 | 56.6 | 56.4 | 52.2 | 54.9 | 54.3 | 53.5 |
| Supplier Deliveries (NSA) | 53.5 | 54.0 | 55.0 | 50.5 | 51.8 | 51.7 | 50.6 |
| Prices Index | 50.1 | 52.4 | 49.7 | 60.4 | 56.8 | 55.6 | 59.3 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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